China is dependent on economies of scale. TFG is about to knock the crap out of that against China. Many Chinese car manufacturers sell at a loss.
“This is only going to accelerate”. No. China is a house of cards that is about to fall.
Japan has the advantage of demand side economics. China has lost that over the last 4 years.
But
The trade war about to kick off will destroy China.
In 2023, China’s largest source of trade surplus was the United States, with a trade balance of approximately $336 billion. China’s top trading partners in 2023 were:
United States: Total trade value of $664.5 billion
Japan: Total trade value of $310.8 billion
South Korea: Total trade value of $310.7 billion
Hong Kong: Total trade value of $288.2 billion
Visualizing All of China’s Trade Partners
China’s total merchandise trade surplus in 2023 was $823.2 billion, which is the value of exported goods minus the value of imported goods. A positive value indicates a trade surplus.
China’s most common export destinations are the United States, Hong Kong, Japan, Germany, and South Korea. Some of China’s most exported goods include broadcasting equipment, integrated circuits, computers, office machine parts, and semiconductor devices.
I do not see where a trade war with the USA will make a difference in the “Not the west” car market. The US car manufactures hold 3 percent of the worldwide auto market, I believe that the chart included the USA.
While I expect China to have some problems, the tariffs by the USA may not be the biggest. The biggest is that all those shiny factories are manned by 40 and 50 year olds and there is not enough labor to replace them. Bad for the world is that unless India and Africa can be brought up to speed, there is no where near enough labor to replace the aging Chinese.
This doesn’t mean that auto companies that are depending on ICE sales to stay in business get relief, it means that when companies start bidding up the cost of labor, the ones with margins and/or growth get the labor and those that do not have growth or margins just wish they could build stuff.
For the time being, until factories are built and manned, or the economy of the USA shrinks dramatically, China will continue to sell a lot of stuff to the USA simply because there is no one else to build it at any price.
2025 may be a little soon, but I will keep a close eye on India and Africa for manufacturing growth.
I don’t think so. In an era when tech disruption occurs at an ever more rapid pace, the most successful companies are not the ones building/selling commodities at the cheapest price. They are the ones doing the disruption.
I don’t believe musk ever wanted to be yesterday’s GM or today’s BYD. He was never racing against China’s car companies. He wants Tesla to be more like Google or Job’s Apple, a company that is continuously disrupting, hence FSD, robots, and robotaxis.
Texas Instruments (TI) primarily manufactures their semiconductors, including flat panels, in Texas, USA, with key locations including Richardson, Dallas, and Sherman, where they operate wafer fabs for advanced 300mm semiconductor manufacturing